Stocks are set to open flat-to-lower on Tuesday, easing back after a string of gains in recent sessions as investors wait for the floodgates to open on the first-quarter earnings season. Wall Street is braced for the quarterly earnings to kick off in earnest, with aluminum producer Alcoa Inc. set to release its results after Tuesday's close and reports due later in the week from General Electric and Yahoo Inc. . With no key economic data on tap, investors will be looking for signs that earnings are shaping up as anticipated. Analysts are expecting the operating earnings of the companies in the Standard & Poor's 500 index <.SPX> to rack up a gain of nearly 17 percent, according to Thomson First Call. Cereal maker Kellogg Co. was in focus after it gave a bullish first-quarter earnings forecast on Monday and slightly raised the range for its full-year profit outlook. But after two weeks of sharp market gains, investors are beginning to take a more cautious approach. With the Dow Jones Industrial average <.DJI> up about 500 points from the 2004 low it hit in late March, "you can understand the profit-taking that sets in each morning," said Larry Wachtel, market analyst Wachovia Securities LLC. "I would say that the selling stems from the success of the past two weeks." Standard & Poor's 500 stock index futures for June were off 2.10 points at 1,146.10, while Nasdaq futures for the same month were down 3 points at 1,506.
Stocks zipped higher on Monday as unexpectedly strong data on the U.S. services sector sent investors on a buying spree. Recent economic data, including a report on Friday that showed employment grew at its fastest monthly pace in nearly four years, has reassured investors that the economy's recovery remains on track. At the same time, it has also sparked concern that the Federal Reserve may have to hike interest rates as early as this summer. U.S. financial markets will be listening for any clues to the Fed's next move when Federal Reserve Bank of St. Louis President William Poole speaks on "Inflation Signals and Inflation Noise" before a luncheon hosted by the University of Arkansas at Little Rock at 1:30 p.m. EDT (1730 GMT).
Among other stocks to watch was medical device maker Boston Scientific Corp. , which said on Monday its Taxus drug-coated stent has exceeded its early U.S. sales targets. Technology network security company SafeNet Inc. on Monday forecast first-quarter earnings below analysts' expectations and lower full-year results to account for the March 15 closure of its merger with Rainbow Technologies. In overseas trading, Japan's Nikkei average rose about 1 percent to reach its highest closing level in 32 months on Tuesday after a jump in the dollar against the yen triggered buying in Sony Corp <6758.T> and other tech shares. European shares hugged the unchanged mark, however, as concerns over U.S. interest rates sapped investor enthusiasm after a three-day advance. The FTSE Eurotop 300 index <.FTEU3>, which has risen 3.7 percent since last Wednesday's close, was off 0.1 percent.///